Timeshare Industry Leaders Speaking Out in Support of Timeshare Owners

News sources across South Carolina and within the timeshare industry itself have been abuzz over a proposal to the South Carolina Tax Realignment Commission. The proposal, drafted by a subcommittee of the state’s Tourism Alliance and the state’s Chamber of Commerce Tourism Committee, calls for adding South Carolina’s existing accommodations tax to timeshare maintenance fees statewide. It’s a move that some critics say looks suspiciously like an attempt to squeeze more money out of those who already do so much to support the state’s tourism economy.

Ironically, the South Carolina Tax Realignment Commission is a state legislature-appointed committee tasked with, “…maintaining and enhancing the state as an optimum competitor in the effort to attract business and individuals to locate, live, work, and invest in the state.” Yet a proposal to tax South Carolina timeshare owners through both the taxes they already pay by way of their annual maintenance fees and again as a tourist tax added to these same fees serves not as an attraction, but as a serious deterrent.

Accommodations taxes (also called tourist or bed taxes) are an add-on tax to hotel and motel rooms, and in many states to any short-term apartment or vacation home rental. Presently, South Carolina timeshare owners do not pay this tax, but they do pay other taxes that benefit state revenues. Through their annual maintenance fees, timeshare owners pay the property or real estate taxes at their home resort– properties often assessed as high-dollar developments built on prime real estate.

Additionally, the annual fee paid by timeshare owners provides the funds for the timeshare’s HOA to pay the payroll taxes on the resort staff as well as sales taxes on any items purchased by the resort, such as cleaning supplies or building materials. Annual fees, which are paid whether or not an owner uses the timeshare, also pay utility taxes on the resort’s use of phone, water, cable, satellite, electricity, and gas.

And it doesn’t stop here…

If a residential property owner in South Carolina rents his property to someone else for a short-term stay, the property owner is responsible to pay the accommodations tax on his rental income. Likewise, when South Carolina timeshare owners use their timeshare as a rental, they currently pay both their maintenance fee to the resort (which goes in part to pay property taxes) and the accommodations tax on the money received by renting. In other words, they follow the same rules all other South Carolina homeowners follow.

Jason Gamel, vice president of state government affairs for the American Resort Development Association, reinforces the position that timeshare owners are already South Carolina taxpayers in the form of property taxes, and describes the premise on which this new proposal is based as faulty. “A timeshare owner,” Gamel explains, “is a real property owner in the state of South Carolina. It’s no different than someone owning a second home.”

As individual consumers, timeshare owners in South Carolina (and other states) make a rock-solid contribution to local economies through the taxes they pay on the goods and services used during their holidays and by the economic influx of the actual dollars they spend while on vacation. Earlier this month ARDA released a study developed in conjunction with Ernst & Young, which shows that for 2009, the economic impact of the timeshare industry on the U.S. economy was $68 billion, with $8.4 billion of that coming in the form of taxes.

Perhaps the handful of South Carolina hoteliers who are behind this double-taxation proposal haven’t fully considered that today’s economy has already turned ‘walking away from’ into an option many homeowners and timeshare owners consider viable if faced with a mortgage they are struggling to pay. As the federal government works to find ways to help homeowners save their ownership, how inappropriate is it for a state government to attempt to implement standards that make it more difficult than ever for real property owners in the form of timeshare owners to hang on to their ownership?

Since 1969, ARDA has been working to support the needs of timeshare owners, strengthen the industry, and help effect legislation that protects and preserves the rights and privilege of timeshare. They have promised to “put up fierce opposition” to this tax and all us who make up the timeshare industry should stand with them in support of South Carolina timeshare owners and the future of the timeshare industry there.